By George Ralph, RFA – I’ve written before about the ways in which hedge funds can gain much needed competitive edge in order to stand out in this crowded marketplace, and there are a few key areas where firms can excel and nudge ahead of the competition. Developing solutions to automate workflows is a key area for many firms, as bespoke, slick workflows can optimise operations at every stage of a trade.
Anything that improves the investor’s experience is a good thing and it is becoming more important than ever to provide first rate customer service. However, we work with firms which are using multiple systems which don’t talk to each other, and information is hard to find, or time consuming to access. Without instant access to the information that customers need, firms are struggling to meet customers’ expectations and wasting valuable administration time. A customised workflow could pull data from multiple sources so that it is to hand when customers need it, allowing them to closely monitor trade status, positions and counterparty exposure and customise reports in real time.
Scrupulous regulatory compliance can also be another deal breaker for many investors, many preferring centres with strict regulations (obviously feeling that their capital is better protected), and hedge funds may find that customised workflow solutions help them to meet the time critical reporting requirements of regional regulations such as AIFMD, FCA reporting, OTC clearing and reporting, Short Selling Regulation and the imminent MiFID II directive. By streamlining and automating workflows, only the data that is needed will be reported, minimising manual interventions and reducing the burden on individuals.
Marketing accounts for a huge proportion of spend on marketing for most alternative investment firms, and this too can benefit hugely from a set of workflows which take away the guesswork when dealing with strengthening investor relations, launching new vehicles or attracting new capital. Firms can use technology to drop feed the right set of information at the right time, using the right delivery mechanism, in the right order. They can then measure the impact and analyse what has been successful, with who and when. Using artificial intelligence or machine learning solutions, fund managers and marketers can work out what vehicles are likely to be well received and what behaviour investors could display in the future.
Streamlined workflows in each part of the firm can play a huge part in the risk management strategy too, as the manual element of many tasks is minimised, and team members are guided and supported to manage their workloads from start to finish, ensuring that vital processes are followed and creating an audit trail along the way. Devise workflows that can scale as the firm grows, with minimal development work.